Telecom Italia weighing up 30% job cuts over Enel fibre threat

07 April 2016 | Jason McGee-Abe

Telecom Italia is reportedly deliberating on whether it should cut up to 15,000 jobs as a result of the competition faced from state-controlled power utility Enel, which is planning a fibre-optic broadband network.

If the reports are true, the figure amounts to around 30% of Telecom Italia’s workforce. The anonymous inside sources said Enel’s plans will make it easier for the incumbent’s rivals to provide faster web access, reports Bloomberg.

Interestingly, the Italian Economy Ministry is Enel’s largest investor, with a circa 24% stake. Michele Azzola, national secretary of the SLC-Cgil telecommunications workers union, added to Bloomberg that if the redundancies go ahead, “the blame will be on Renzi”, the Italian PM. “During the last year, Italy’s premier lost any interest in the country’s largest phone carrier.”

The Enel OpEn Fiber (EOF) plan will see a fibre-to-the-home network being gradually rolled out, through its pipes, and ultrafast broadband released to 224 Italian cities.

“Installing fibre cables through our electricity network, which reaches the businesses and homes of 32 million Italians, will enable wide-ranging coverage of the country at competitive costs, creating value for Enel and for all players that will want to use this new, important infrastructure,” CEO and GM of Enel, Francesco Starace, stated last month.

The incumbent operator reportedly risks losing around 5 million wholesale clients, most of whom are from Vodafone Plc’s Italian unit and Wind Telecomunicazioni SpA, the sources told Bloomberg.